Intel is Serving Major Xeon Discounts to Combat AMD EPYC

For the past few years, Intel has not been known for giving large discounts unless you are big enough to buy direct. Intel may have a massive amount of Xeon revenue, but unless you are one of the large hyper-scalers, or a major OEM, or are building a large cluster, discounts on CPUs have been relatively small. We have been hearing through a number of customers that Intel is finally engaging in significant discounts to hold AMD EPYC at bay.

Getting Intel Xeon Discounts

From what we have been hearing from a number of customers, discounts are happening at quantity levels *well* below 1000 CPUs. Discounts or incentives are reaching well into the double-digit percentages. For some customers, if they are evaluating an AMD EPYC purchase versus a competitive Intel Xeon part, Intel is more or less matching the price.

Intel Xeon Silver 4110 Top And Bottom

This is not happening on frequency optimized SKUs as much since the licensing savings can be hundreds of thousands of dollars per machine. Intel knows that AMD EPYC is targeting this segment as heavily in this generation so the discounts are happening more often in the mainstream higher core count parts.

At VMworld this year, we heard this from a number of our readers and vendors at the show. The behavior shift has been dramatic in that it was a topic of a number of discussions.

A key trigger seems to be an organization’s willingness to adopt AMD EPYC. Our advice, if you are buying even as few as 50-100 servers, is to get an AMD EPYC system quote from your reseller. Doing so seems to be the trigger for Intel’s discount approvals.

Impacts of the Intel Xeon Discounts

File this one under a “no duh” bit. One of the most common forms of dealing with a new market entrant is competing on price. What this also means is that if you are buying, even 50-100 servers for a virtualization cluster, you may also want to price out AMD EPYC servers. AMD EPYC has such aggressive pricing that Intel may decide to discount accordingly to get a deal even in the low hundreds of server ranges.

Intel Xeon Scalable Fabric V No Fabric

Taking a step back, this makes sense. There is likely a low single-digit percentage of swing purchases (e.g. ones that will consider Xeon and EPYC) in this generation. If Intel needs to discount on say 1-2% of Xeon sales, but it can put more pressure on AMD EPYC, then this is textbook competitive pricing strategy.

The other major impact is that as you read future reviews, do not take AMD EPYC versus Intel Xeon Scalable pricing at face value. Intel already has discounts for its largest customers. It also can afford to take a mid-list price/ mid-discount or high list price/ high discount competitive pricing and discounting strategy. Unlike what we saw a year ago, Intel Xeon RCP is not as firm.

For buyers, Intel was not as willing to discount in Q1 2018. As systems like the AMD EPYC Powered Dell EMC PowerEdge Servers Are Here and our Dell EMC PowerEdge R7415 Review, AMD has only been available from most Top 5 vendors over the past few months. At the same time, it may pay to shop Intel versus AMD as we are hearing EPYC pricing may help customers at risk of switching get better pricing from Intel even if they do not buy EPYC.

Final Words

Price is not the only factor when determining a server purchase. Indeed, servers with a lot of RAM, many drives, or a number of accelerators will see CPU pricing be relatively small in the overall TCO picture. We highlighted this as part of our DeepLearning10 and DeepLearning11 builds. At the same time, this market behavior is both classic and significant. It shows that Intel is feeling the AMD EPYC threat. For customers, leaning into this competitive environment and getting a competitive quote may be a small step to save tens of thousands (or more) on your next server cluster purchase.

Patrick has been running STH since 2009 and covers a wide variety of SME, SMB, and SOHO IT topics. Patrick is a consultant in the technology industry and has worked with numerous large hardware and storage vendors in the Silicon Valley. The goal of STH is simply to help users find some information about server, storage and networking, building blocks. If you have any helpful information please feel free to post on the forums.

37 COMMENTS

I can confirm. Our reseller said Intel dropped pricing per CPU by $600. You never know what the actual discount is since we only get the quotes. The total was 84 servers on that purchase so it was around 100k in savings. I’m happy with that and we bought Intel in the end.

Don’t worry about AMD, the Zen dies are so cheap to make compared to the way intel makes their CPU’s. Beginning of next year Zen2 on 7nm will be released and intel is already having problems to make enough 14nm++++++++++++ and intels 10nm is for 2020.

I agree with Ed. It seems everyone is using Epyc only as a means to get a discount on Intel hardware. Either Intel didn’t milk customers hard enough in the past or buyers suffer from amnesia. Maybe I should buy Intel stocks and hope for AMD to finally go bancrupt so Xeons sell for two kidneys a piece.

After I read the 1st comment I was like…WTF!? And I really hope this company chokes at all the Intel security issues we had this year and the ones that might still come….

It really comes down to this:
If you want to have innovation and progress you need competition. For that companies have to buy AMD NOW otherwise AMD will vanish and you will all get bent over by your lovely Intel rep who will collect all the money that falls out of your pocket while….ah well you know what I mean.

Simple message fr 2017 and 2018:
Intel is for masochists

PS: I know there are lots of workloads where Intel just is the better pick, but if it isn’t then why buy it?

I can confirm we had this happen on our quote. We’re actively POC with EPYC. Our reseller initiated.

Strange article. I thought it was anti-Intel. Then I thought it was anti-AMD. Leaving thinking maybe this is a balanced way to present normal market competition. Did anyone think Intel would sit there and lose head to head deals without doing anything?

Intel has done similar things in the past (ie with the Opteron servers) — both legal and illegal — to completely stifle competition.

Really, the “right” thing to do for the upcoming few years at least would be to support AMD and buy their servers, in order to foster a healthy competition. A sustained monopoly is never a good thing for customers, as I am sure most people have realized already.

1st comment is like a nerd that gets a makeover from a girl friend and now gets attention from all the girls. Instead of thanking and rewarding his friend… He takes the most popular girl in school to the prom, leaving friend out to dry.

Well im sick of intel. We are switching all of our k8s and openstack environments to epyc with its renewal early in 2019. First epyc servers arrived already for some other services and no complaints so far.

Why are people so mad about this if it’s driving competition? All this is going to do is make Intel lose on potential profits because at this point the word is already out and I’m sure every major customer is going to use discount code “EPYC”.

So people who were already going to buy Intel anyways are going to get it for cheaper, and the potential profits that Intel is banking on are people who were going chose AMD, but changed their mind because of the “discount”. It’s an extremely hopeful marketing strategy and I’m sure that in a few months if not weeks resellers will be asked to stop discounting because the inflow of “EPYC” discount demands will be massive.

I don’t understand why people are saying this is illegal by Intel. It’s normal competition in the IT industry. We see vendors get discount approvals from competitive quotes all the time. It’s one of the reasons almost everyone’s procurement requirements are for multiple vendors. Just having more than one vendor in a bid means that one can’t gouge on pricing and one will have to come to a competitive pricing level to win. We don’t always go with the cheapest, but competitive pricing is a must. Unlike buying on Amazon, discounting on deals is just the way IT works.

Even if you’re getting a kitchen remodel, and have two contractors, if you like one more you’ll go back to that one and ask if they can match the other quote. This isn’t just IT. It’s everywhere and a standard business practice for thousands of years.

No it is not illegal to lower your price to beat the competition. That’s how the free market works. AMD can lower their price now, and Intel again, and AMD again, until customers get the ROCK BOTTOM price.

If you were going to buy Intel anyway, getting an AMD quote and subsequently an Intel discount will not hurt AMD’s business. It will only give Intel less profit to fund their anti-competitive ways.

Plus this move will increase visibility and awareness of AMD products and pricing. And if even a small number of customers invests some of the saved money into buying AMD products for evaluation purposes, it is a win for AMD.

How ironic, AMD used to play the strategy of better pricing to get an uncompetitive product out the door. Now it is Intel’s turn. This didn’t work out so well in the end financially. Even more ironic that Intel hired former lead architects of AMD to fix this.

I’m wondering why people are knowing buying a processor with a greater number of more severe security issues over a capable alternative. I suppose it boils down to validation, no one wants to deal with it when you can slot in another Xeon, but I would have expected that security would command a higher priority over validation these days. We’re taking about a EPYC that’s been re-validated multiple times over already.

If anyone can shed some light on the decision making process in regard to security considerations, I’d love to read about it!

Intel has for superior security than AMD. Intel literally has hundreds of academics working for free to find its security flaws so that they can get their name in the newspaper and write an article. once these flaws are found Intel immediately patches them. This is on top of its paid security workforce . With all of these people trying to crack and Intel chips, an actual criminal has no chance.

a city with no police force is not as safe as one with a strong police force, even if the former never has a reported crime.

I just wanted to to say I don’t mean everyone should drop Intel. That is not how business works, I fully understand. And if you were planning to get Intel, and used AMD to get discount, that is also fine as well. What I couldn’t understand is lots of people spends lots of time tested EPYC, about to make a purchase, and got discount from Intel, than jump to Intel instead. Why couldn’t the order be split half to Intel and half to AMD? I also don’t understand how some people were crying foul and cheering for AMD but decided to change stances the moment they got a sweet from Intel.

If AMD don’t get things done exceptionally well in the next 2-3 years it may not be able to survive in the long run. As someone have mentioned already, may be we don’t deserve AMD.

“What I couldn’t understand is lots of people spends lots of time tested EPYC, about to make a purchase, and got discount from Intel, than jump to Intel instead. Why couldn’t the order be split half to Intel and half to AMD? I also don’t understand how some people were crying foul and cheering for AMD but decided to change stances the moment they got a sweet from Intel.”

Free all-you-can-have patches to update for job security 😀

Having multiple suppliers is surely a healthy thing for the industry. With the help of AMD as the 2nd source, Intel won the IBM PC deal over Motorola, since a solid 2nd source was required by IBM.

I am a high-quality chip designer, and I do know designing chips against specs for quality but don’t know box users’, IT people’s, feeling comfortable in using the chips with the known repeated spec violations, anymore unknown or known but not disclosed if not found by researchers!

“What I couldn’t understand is lots of people spends lots of time tested EPYC, about to make a purchase, and got discount from Intel, than jump to Intel instead. Why couldn’t the order be split half to Intel and half to AMD? I also don’t understand how some people were crying foul and cheering for AMD but decided to change stances the moment they got a sweet from Intel.”

EPYC is good for Intel prices.
Everyone with experience with obsolete Opterons and inefficient paralelization wouldn’t move to those waters again.
And especially with 32-core EPYC is in fact 4*8-core sharing lots of stuff and with many bottlenecks.

And regular EPYC for 2-socket mobo’s are expensive. Only “good value/money” variants are P-versions for single-socket mobo’s. You will get 32-core and ECC support for 2500 Eur.

For high load use, EPYC’s are insufficient because you will have 2 cpu * (4*8-core) EPYC and that’s not enough in comparison with 4 cpu Xeon’s.
So you need loadbalancer and sync all data through SPF+.

And in the end, you will pay almost the same price but have tons of hassle.
And what worries me most is reported 2+ times higher latency to access DB data. So if quick DB access is all you need, you will do way better with any refurbished E5 v4 for 1k EUR.

But I must admit P-versions with 32-cores are incredible value/money if that’s enough for you.